Renewable Portfolio Standards
RPS (Renewable Portfolio Standards) are voluntary in Indiana. They are merely a goalpost for utility companies, not a requirement. The goal is to make 10% of energy through renewable sources by 2025, a much easier goal than many other states have given themselves.
Strong net metering laws are a bonus for Indiana residents, smoothing the way to get a solar system connected to the public grid. Net metering is a system in which solar panels or other renewable energy generators are connected to the public utility, allowing customers to offset the cost of the power they draw from the utility with credits they earn on their own production. If your system produces more energy than you need, the excess power is sold to the grid, which you see as a credit on your power bill.
Performance-Based Incentives (PBI)
Indiana offers PBIs, which are incentives based on the actual power your system generates. The state calls them Power Performance Payments and they are handled through NIPSCO. You get paid based on the actual kilowatt-hours (kWh) or BTUs generated by your renewal-energy system. The power produced is credited as Solar Renewable Energy Credits (SRECs), the value of which fluctuates by the rule of supply and demand.
Sales Tax Exemption
You don’t pay sales tax in Indiana on the cost of your installed solar system.
Property Tax Exemption
The value of your Indiana home will not be reassessed after the addition of a solar system. You keep paying property tax based on the value before adding the system.
Federal Tax Credit
In addition to these many incentives in Indiana, of course you also get the hefty tax credit from the Federal government. The solar Investment Tax Credit (ITC) is worth 26 percent of the system cost, and will be deducted from your Federal income tax. The credit goes to those who buy their system (cash or loan), not to those who lease. If you lease a system, then the incentives go to the third-party owner. A good reason to buy instead of lease!